Rick Raw: Another CEO Outrage–Countrywide CEO Angelo Mozilo Leaves Company $1.2 Billion in Red Ink, but Bails out with Golden Parachute

By Rick Grant rickgrant01@comcast.net www.rickatnight.com

Here we go again. Yes, in past Rick Raws I’ve ranted against corrupt CEOs who bring down companies and walk away with obscene amounts of money. Here is a case that is so egregious, it begs to be the recipient of my Golden Parachute Award for the most blatant CEO thievery in the business. Yes, the goon of the month is Angelo Mozilo–a slick operator who has the high-styled swagger of John Gotti. Last week, gumba Mozilo was dragged before congress to defend his big ripoff of Countrywide Mortgage.

Clearly, it was the no-sweat carpet on which Mr. Mozilo was standing. Hey, Congress–that’s like appearing before the Mafia’s high commission after making a big score. He had to explain to members of Congress how he can justify running Countrywide into the dumper to the tune of $1.2 billion in the third quarter of 2007, and another $422 million in the fourth quarter, causing the stock to plummet 80% between February and the end of the year. And then, he brazenly walked away with $21.9 million in salary and stock, and without a tinge of guilt, he sold $121 million in stock. Hey, nice work if you can get it.

Of course, the members of congress secretly wanted to know where they could apply for such a choice job. Blame it on Countrywide’s board of directors who brought in Mozilo to boost the company’s image and profits. He was supposed to be a rock star and send the company stock into the stratosphere. In reality, he was just another CEO wolf who was given the keys to the company’s hen house. Man, these CEO con men have balls the size of boulders. They steal money the old fashioned way–legally or not.

Like me, the FBI and the Justice Department cried foul and have started an investigation into Countrywide’s and Mozilo’s financial machinations. FBI spokesman, Richard Kolko declined to confirm that an investigation is ongoing. However, according to unnamed sources from the Detroit Free Press, "investigators are looking at evidence that may suggest that company (Countrywide) executives knew their mortgage securities would see many more defaults than predicted in its public documents."

Meanwhile, while Mozilo is drinking single malt scotch on his yacht, and counting his money, Bank of America is in the process of acquiring Countrywide for $4 billion in stock. But wait, hold on to your portfolio, there may be a problem if the investigators uncover fraud. It may queer the deal. Mozilo could be another alleged ex-CEO felon playing tennis at Club Fed in Florida in the near future.

With all the CEOs being discredited, indicted, or convicted of crimes, why is there no oversight to protect investors against this blatant theft of big corporate assets. These modern-day grifters operate in the open, manipulating stock and use sophisticated scams to steal large amounts of stockholders’ money. Going in, these CEOs get guarantees like golden parachutes, sweetheart salaries, and stock options. Not surprisingly, they have no incentive to produce positive results, so they have a field day ripping off the company.

In a free market economy, corporations do not want the government in their board rooms. However, to protect investors, the SEC should adopt a continency plan that demands CEOs’ compensation plans be directly proportional to their performance. And if the company of which they are guiding loses vast sums of money like Countrywide, then they get zip. Or, call in the Mafia, and take out a hit on the bastard. That would send a message.